Federal Register of Legislation - Australian Government

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Determinations/Other as made
This instrument prescribes education and training standards for persons who provide personal advice to retail clients in relation to relevant financial products or tax (financial) advice services.
Administered by: Treasury
Registered 06 Dec 2021
Tabling HistoryDate
Tabled HR08-Feb-2022
Tabled Senate08-Feb-2022

Commonwealth of Australia Crest

 

Corporations (Relevant Providers—Education and Training Standards) Determination 2021

I, Jane Hume, Minister for Superannuation, Financial Services and the Digital Economy, and Minister for Women’s Economic Security, being satisfied that doing so is necessary or desirable to ensure that relevant providers are adequately trained and competent to provide personal advice to retail clients in relation to relevant financial products or to provide tax (financial) advice services, make the following determination.

Dated               1 December 2021

 

Jane Hume

Minister for Superannuation, Financial Services and the Digital Economy
Minister for Women’s Economic Security

 

  

  

  


Contents

Part 1—Preliminary                                                                                                      1

1‑1  Name..................................................................................................................................... 1

1‑2  Commencement..................................................................................................................... 1

1‑3  Authority............................................................................................................................... 1

1‑4  Definitions............................................................................................................................ 1

Part 2—Education and training standards for relevant providers                           3

Division 1—The first standard                                                                                3

Division 2—The second standard                                                                            3

2‑30  Approved principles in relation to exams............................................................................ 3

2‑35  Principle 1: testing relevant knowledge and skills............................................................... 3

2‑40  Principle 2: exam questions................................................................................................. 4

2‑45  Principle 3: duration of exams............................................................................................. 4

2‑50  Principle 4: marking or scoring of exams............................................................................ 4

2‑55  Principle 5: processes and procedures for the taking of exams........................................... 4

Division 3—The third standard                                                                               7

Division 4—The fourth standard                                                                             7

Part 3—Additional requirements for relevant providers who provide tax (financial) advice services 8

Division 3—Requirements to complete specified courses                                       8

3‑60  Requirement to complete specified courses......................................................................... 8

3‑65  Specified course: commercial law....................................................................................... 8

3‑70  Specified course: taxation law............................................................................................. 8

Division 5—Requirements for continuing professional development                   10

3‑120  Requirement for continuing professional development................................................... 10

3‑125  Additional requirements for tax‑specific CPD................................................................ 10

Division 6—Application and transitional arrangements in relation to additional requirements for relevant providers who provide tax (financial) advice services        12

Subdivision 6-C—Application and transitional arrangements in relation to requirements to complete specified courses                                                                                                                     12

3‑170  Transitional—registered tax (financial) advisers who are relevant providers on 31 December 2021           12

3‑171  Transitional—relevant providers awaiting registration as tax (financial) advisers on 31 December 2021    12

3‑172  Transitional—other relevant providers on 31 December 2021........................................ 12

3‑173  Transitional—commercial law courses completed before 1 January 2022...................... 13

3‑174  Transitional—tax law courses completed before 1 January 2022.................................... 13

Subdivision 6-E—Application and transitional arrangements in relation to continuing professional development                                                                                                                                   13

3‑200  Application—Additional requirements for tax‑specific CPD.......................................... 13

Schedule 3—Specified approved providers                                      14

Part 2—Tax law courses                                                                                             14

 


Part 1Preliminary

  

1‑1  Name

                   This instrument is the Corporations (Relevant Providers—Education and Training Standards) Determination 2021.

1‑2  Commencement

             (1)  Each provision of this instrument specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

 

Commencement information

Column 1

Column 2

Column 3

Provisions

Commencement

Date/Details

1.  The whole of this instrument

The later of:

(a) the day after this instrument is registered; and

(b) 1 January 2022.

 

Note:          This table relates only to the provisions of this instrument as originally made. It will not be amended to deal with any later amendments of this instrument.

             (2)  Any information in column 3 of the table is not part of this instrument. Information may be inserted in this column, or information in it may be edited, in any published version of this instrument.

1‑3  Authority

                   This instrument is made under the Corporations Act 2001.

1‑4  Definitions

Note:       Paragraph 13(1)(b) of the Legislation Act 2003 has the effect that expressions have the same meaning in this instrument as in the Corporations Act 2001 as in force from time to time.

                   In this instrument:

Code of Ethics has the meaning given by section 910A of the Act.

CPD year has the meaning given by section 910A of the Act.

existing provider has the meaning given by section 1546A of the Act.

financial product advice has the meaning given by section 766B of the Act.

provisional relevant provider has the meaning given by section 910A of the Act.

relevant provider has the meaning given by section 910A of the Act.

retail client has the meaning given by sections 761G and 761GA of the Act.

taxation law has the meaning given by the Income Tax Assessment Act 1997.

tax (financial) advice service has the meaning given by section 910A of the Act.

the Act means the Corporations Act 2001.


Part 2Education and training standards for relevant providers

Division 1The first standard

Note:       See Corporations (Degrees, Qualifications and Courses Standards) Determination 2020 for the currently approved bachelor or higher degree, or equivalent qualifications.  The instrument, originally made by the Financial Adviser Standards and Ethics Authority Ltd, was saved by section 1684M of the Act and will continue in force until it is repealed and remade by the Minister.

Division 2The second standard

2‑30  Approved principles in relation to exams

                   Under subsection 921B(6) of the Act, each of the principles specified in a provision in this Division is an approved principle for the purposes of exams to be administered by ASIC under subsection 921B(3) of the Act.

2‑35  Principle 1: testing relevant knowledge and skills

             (1)  This section specifies a principle relating to testing relevant knowledge and skills.

             (2)  An exam must be designed to test whether the person taking the exam has the knowledge and skills covered in subsection (3) at a AQF level 7 as described in Australian Qualifications Framework, 2nd edition (January 2013) published by the Australian Qualifications Framework Council.

Note:          On the day this instrument was registered, this publication was available at https://www.aqf.edu.au/.

             (3)  For the purposes of subsection (2), an exam must cover each of the following knowledge and skills as they apply in relation to financial products:

                     (a)  knowledge and skills needed to understand and conform to the requirements of each of the following:

                              (i)  Chapter 7 of the Act;

                             (ii)  the Anti‑Money Laundering and Counter‑Terrorism Financing Act 2006;

                            (iii)  the Privacy Act 1988;

                            (iv)  Subdivision 50-AA of the Tax Agent Services Act 2009;

                     (b)  knowledge and skills needed to be able to apply ethical and professional reasoning, and to communicate effectively, including the ability to:

                              (i)  identify the obligations imposed by the Code of Ethics and how to comply with them; and

                             (ii)  articulate the importance of codes of ethics and codes of conduct, being guides of principles designed to help professionals conduct business honestly and with integrity, and the need for relevant providers to conform to the Code of Ethics in the context of professional standards; and

                            (iii)  apply ethical frameworks to solve dilemmas encountered as a relevant provider; and

                            (iv)  identify the importance of, and demonstrate, the duty of a relevant provider to act with integrity and in the best interest of each of the provider’s clients; and

                             (v)  identify the need for due diligence and the need to maintain client files and records;

                     (c)  knowledge and skills needed to construct suitable financial product advice through an understanding of:

                              (i)  the environment in which financial product advice is sought by and given to new and existing clients; and

                             (ii)  the need to prevent and avoid misconduct and inappropriate advice; and

                            (iii)  population and community profiles of retail clients; and

                            (iv)  consumer behaviour and decision‑making; and

                             (v)  the advice strategies suitable for different retail clients.

2‑40  Principle 2: exam questions

             (1)  This section specifies a principle relating to the questions in an exam.

             (2)  An exam must contain at least 70 questions, comprising:

                     (a)  at least 64 multiple choice questions; and

                     (b)  at least 6 written response questions requiring short answers or report writing.

2‑45  Principle 3: duration of exams

             (1)  This section specifies a principle relating to the duration of an exam.

             (2)  A person taking an exam must have 3.5 hours to complete the exam, of which at least 15 minutes must be set aside as reading time.

2‑50  Principle 4: marking or scoring of exams

             (1)  This section specifies a principle relating to the marking or scoring of an exam.

             (2)  An exam must show the maximum marks that may be awarded for each question.

             (3)  The questions in an exam, and the maximum marks that may be awarded for each question, must be approved by persons with appropriate expertise, as determined by ASIC.

2‑55  Principle 5: processes and procedures for the taking of exams

             (1)  This section specifies principles relating to processes and procedures relating to the taking of exams.

Who may sit an exam?

             (2)  A person may only take an exam if:

                     (a)  any of the following apply:

                              (i)  the person is a provisional relevant provider who has met the education and training standard set out in subsection 921B(2) of the Act (the first standard);

                             (ii)  the person is an existing provider; and

                     (b)  the person has applied to ASIC take the exam (in the manner and form approved by ASIC), and has been subsequently registered by ASIC to take the exam at a particular date and time; and

                     (c)  the person has paid ASIC the prescribed fee to take the exam; and

                     (d)  the person has not been excluded from taking the exam under subsection (9).

Note 1:       For subparagraph (a)(i), the education and training standard set out in subsection 921B(2) of the Act is met if the person:

(a)    has completed an approved bachelors or higher degree, or an approved equivalent qualification (see Division 1); or

(b)    has completed an approved foreign qualification (see section 921G of the Act).

Note 2:       The amount of the fee is prescribed in the Corporations (Fees) Regulations 2001.

Methods for taking an exam

             (3)  An exam must be taken by one the following methods, as determined by ASIC for a person:

                     (a)  by attending a location at which an exam is to be held (an exam location);

                     (b)  by way of the internet or other technology that allows the person to take the exam without being physically present at an exam location;

                     (c)  by way of alternate arrangements in accordance with subsection (13).

             (4)  A person is not to be admitted to an exam location for an exam unless the person:

                     (a)  meets the requirements of subsection (2), and has been advised by ASIC that the person is registered to attend the location to take the exam; or

                     (b)  is staff member or agent of ASIC; or

                     (c)  is present because of alternate arrangements made by ASIC under subsection (13).

             (5)  ASIC may impose identification requirements for persons to be admitted to an exam location.

Note:          For example, requirements for photo ID may be imposed.

             (6)  A person may only take an exam using the equipment and materials permitted by ASIC to be used, and ASIC may impose reasonable and appropriate restrictions on the person to ensure only permitted equipment and materials are used.

Conduct of the exam

             (7)  A person taking an exam must not engage in any type of conduct that could be reasonably described as plagiarism, cheating, collusion, deception, impersonation, or another form of similar misconduct. An exam is to be properly supervised to prevent a person from engaging in such misconduct.

             (8)  A person taking an exam must comply with an instruction or direction included in the exam document, or that is given by a staff member or agent of ASIC in connection with the exam.

Note:          An example of an instruction or direction included in the exam document is an instruction not to start to record answers to exam questions until after the reading time for the exam has ended.

Consequences of misconduct

             (9)  If a person breaches subsection (6), (7) or (8), ASIC may do one or both of the following:

                     (a)  exclude the person from taking or continuing to take an exam;

                     (b)  fail the person.

Marking and results

           (10)  A person who has taken an exam is to be notified only that they have either passed or failed the exam, which is to be marked to an overall credit grade (a range of between 65% and 74%, with the final passing mark for a particular exam, being determined by ASIC, as informed by persons with appropriate expertise).

Review of results

           (11)  A person who has failed an exam is to be allowed to apply to ASIC for a review of the marking of the person’s answers to the written response style questions in the exam. ASIC must:

                     (a)  make reasonably available, information about how and by when an application for review may be made; and

                     (b)  provide for the review to be conducted once the prescribed fee has been paid by the person; and

                     (c)  provide for the results of the review to be communicated to the person; and

                     (d)  action only one application for review by the person in relation to the exam.

Note:          The amount of the fee is prescribed in the Corporations (Fees) Regulations 2001.

Deferral of exams for exceptional circumstances

           (12)  ASIC must make arrangements to give effect to all of the following:

                     (a)  that a person be able to apply to ASIC (in the manner and form approved by ASIC) to defer taking an exam at the particular date and time registered by ASIC, if due to exceptional circumstances beyond the person’s control, the person is unable to take the exam at that particular date and time;

                     (b)  establish and maintain reasonable systems and processes for making and dealing with those applications; and

                     (c)  that, if an application is granted, the person be registered to take the exam at another date and time without having to pay another fee.

Note 1:       Exceptional circumstances beyond the person’s control under paragraph (a) may include acute illness, recent loss or bereavement, hardship or trauma (including being the victim of crime or severe disruption to domestic life), a natural disaster, imposition of a public health order, unforeseen call‑up for service (including military service, court appearance, jury service or emergency service), an unexpected equipment failure or malfunction during the exam.

Note 2:       Reasonable processes under paragraph (b) may include requirements for medical or other certificates, or other evidence, to be provided.

Alternative arrangements

           (13)  If ASIC is satisfied that it is reasonable and appropriate in the circumstances to do so, ASIC may make alternate arrangements as to the methods for a person to take an exam. A person requesting alternate arrangements must do so by way of an application to ASIC (in the manner and form approved by ASIC). ASIC must ensure that reasonable and appropriate provision is made for persons with special needs.

Note           For example, reasonable and appropriate provisions may include adjustable desks, ensuring that computer screens have larger fonts, higher contrasting colours and reader assistance (for persons with visual impairments) and support to ensure that staff members can communicate effectively with a person with a hearing impairment.

Division 3The third standard

Note:       See Corporations (Work and Training Professional Year Standard) Determination 2018 for the currently set requirements for work and training.  The instrument, originally made by the Financial Adviser Standards and Ethics Authority Ltd, was saved by section 1684M of the Act and will continue in force until it is repealed and remade by the Minister.

Division 4The fourth standard

Note:       See Corporations (Relevant Providers Continuing Professional Development Standard) Determination 2018 for the currently set requirements for continuing professional development.  The instrument, originally made by the Financial Adviser Standards and Ethics Authority Ltd, was saved by section 1684M of the Act and will continue in force until it is repealed and remade by the Minister.


Part 3Additional requirements for relevant providers who provide tax (financial) advice services

Division 3Requirements to complete specified courses

3‑60  Requirement to complete specified courses

                   Under subsection 921BB(1) of the Act, each requirement to have completed a specified course set out in a provision in this Division is determined as a requirement for a person who provides, or is to provide, a tax (financial) advice service.

3‑65  Specified course: commercial law

             (1)  This section specifies a requirement to have completed a course in commercial law (commercial law course).

             (2)  The commercial law course must be one that covers each of the following subject matters:

                     (a)  Australian laws relating to contracts;

                     (b)  Australian laws relating to organisational business structures and governance;

                     (c)  Australian laws relating to torts, particularly the torts of negligence and negligent misstatement;

                     (d)  the Competition and Consumer Act 2010.

Note:          Organisational business structures referred to in paragraph (b) includes sole traders, partnerships, corporations and trusts.

             (3)  The commercial law course must be designed to provide a person with, as well as assurances that the person then has, knowledge and skills in the subject matters covered in subsection (2) at not less than an AQF level 5 as described in Australian Qualifications Framework, 2nd edition (January 2013) published by the Australian Qualifications Framework Council.

Note:          On the day this instrument was registered, this publication was available at https://www.aqf.edu.au/.

             (4)  The commercial law course must be provided by a registered higher education provider (within the meaning of the Tertiary Education Quality and Standards Agency Act 2011) or a registered training organisation (within the meaning of the National Vocational Education and Training Regulator Act 2011).

3‑70  Specified course: taxation law

             (1)  This section specifies a requirement to have completed a course in Australian taxation law (tax law course).

             (2)  The tax law course must be one that covers each of the following subject matters:

                     (a)  Australian income tax law focussing on the following core concepts:

                              (i)  assessable income, including ordinary income and statutory income;

                             (ii)  deductions, including general deductions and specific deductions;

                            (iii)  tax offsets;

                            (iv)  residence;

                             (v)  source;

                            (vi)  capital allowances;

                     (b)  Australian income tax law as it applies to each of the following types of entity:

                              (i)  an individual;

                             (ii)  a partnership;

                            (iii)  a company;

                            (iv)  a trust;

                     (c)  Australian income tax law and fringe benefits tax law as each applies to employee remuneration, including non‑cash benefits, employment termination payments and employee share interests;

                     (d)  Australian income tax law as it applies to capital gains and losses;

                     (e)  Australian income tax law as it applies to superannuation, including the application of the law to contributions, earnings and benefits;

                      (f)  Australian income tax law as it applies to investments;

                     (g)  Australian income tax law relating to anti‑avoidance, and taxation offences and penalties, including the promoter penalty rules;

                     (h)  Australian laws relating to the goods and services tax, focusing on the core concepts and tax administration.

Note 1:       The relevant Acts providing for Australia’s income tax include the Income Tax Assessment Act 1936 and Income Tax Assessment Act 1997.

Note 2:       The relevant Acts providing for Australia’s fringe benefits tax include the Fringe Benefits Tax Assessment Act 1986.

Note 3:       The relevant Acts providing for Australia’s goods and services tax include the A New Tax System (Goods and Services Tax) Act 1999.

             (3)  The tax law course must be designed to provide a person taking the course with, as well as assurances that the person then has, knowledge and skills in the subject matters covered in subsection (2) at not less than an AQF level 5 as described in Australian Qualifications Framework, 2nd edition (January 2013) published by the Australian Qualifications Framework Council.

Note:          On the day this instrument was registered, this publication was available at https://www.aqf.edu.au/.

             (4)  The tax law course must be provided by one of the following:

                     (a)  a registered higher education provider (within the meaning of the Tertiary Education Quality and Standards Agency Act 2011);

                     (b)  a registered training organisation (within the meaning of the National Vocational Education and Training Regulator Act 2011);

                     (c)  an organisation specified in Part 2 of Schedule 3 to this instrument.


Division 5Requirements for continuing professional development

3‑120  Requirement for continuing professional development

                   Under subsection 921BB(1) of the Act, each requirement for continuing professional development in relation to the CPD year of a financial services licensee set out in a provision in this Division, is determined as a requirement for a person who provides, or is to provide, a tax (financial) advice service.

3‑125  Additional requirements for tax‑specific CPD

             (1)  A relevant provider who provides, or is to provide a tax (financial) advice service, must complete continuing professional development activities, in accordance with this section, to maintain and extend their knowledge and skills in Australian commercial and taxation law, as is relevant to providing a tax (financial) advice service.

             (2)  The additional requirements set out in this section for continuing professional development activities in commercial and taxation law supplement the education and training standards for relevant providers relating to continuing professional development as determined by the Minister in the Corporations (Relevant Providers Continuing Professional Development Standard) Determination 2018.

             (3)  The requirements in the Corporations (Relevant Providers Continuing Professional Development Standard) Determination 2018 are to be supplemented by applying the Determination as if all the following changes had been incorporated into the Determination:

                     (a)  repeal item 1 in the table in section 7 of the Determination and substitute:

 

Item

Column 2

Column 3

 

Content of CPD activity

CPD area

1

The activity is designed to enhance participants’ technical proficiency and ability to develop and provide advice strategies that are appropriate to the objectives, financial situations and needs of different classes of retail clients, but is not in an area referred to in item 6 of this table.

Technical competence

2

The activity is designed to enhance participants’ ability to act as a client‑centric practitioner in advising retail clients, but is not in an area referred to in item 6 of this table.

Client care and practice

3

The activity is designed to enhance participants’ understanding of applicable legal obligations and how to comply with them, but is not in an area referred to in item 6 of this table.

Regulatory compliance and consumer protection

4

The activity is designed to enhance participants’ capacity to act as an ethical professional, but is not in an area referred to in item 6 of this table.

Professionalism and ethics

5

The activity is designed to maintain and extend participants’ professional capabilities, knowledge and skills, including keeping up to date with regulatory, technical and other relevant developments, but is not in an area referred to in another item of this table.

General

6

The activity is designed to maintain, extend or enhance a participants’ professional or technical capabilities, knowledge and skills, including keeping up to date with regulatory, technical and other developments, relevant to providing tax (financial) advice services.

Tax (financial) advice

 

                     (b)  repeal paragraph 9(2)(d) of the Determination and substitute:

 

                   “(d)  a minimum of 9 hours in the CPD area of professionalism and ethics; and

                     (e)  a minimum of 5 hours in the CPD area of tax (financial) advice.”.


Division 6Application and transitional arrangements in relation to additional requirements for relevant providers who provide tax (financial) advice services

Subdivision 6-CApplication and transitional arrangements in relation to requirements to complete specified courses

3‑170  Transitional—registered tax (financial) advisers who are relevant providers on 31 December 2021

                   The requirements in Division 3 of Part 3 of this instrument do not apply to a person if:

                     (a)  the person was a relevant provider immediately before 1 January 2022; and

                     (b)  the person was a registered tax (financial) adviser under subsection 20‑5(1) of the Tax Agent Services Act 2009 as in force immediately before 1 January 2022.

3‑171  Transitional—relevant providers awaiting registration as tax (financial) advisers on 31 December 2021

             (1)  The requirements in Division 3 of Part 3 of this instrument do not apply to a person, from the start of the day specified in subsection (2), if:

                     (a)  the person was a relevant provider immediately before 1 January 2022; and

                     (b)  before 1 January 2022, the person made an application under section 20‑20 of the Tax Agent Services Act 2009 (as in force immediately before 1 January 2022) for registration as a registered tax (financial) adviser; and

                     (c)  immediately before 1 January 2022, the application had not been finally determined; and

                     (d)  after 1 January 2022, the application is granted.

Note:          See item 140 in Schedule 1 to the Financial Sector Reform (Hayne Royal Commission Response—Better Advice) Act 2021 for transitional rules in relation to pending applications for registration of registered tax (financial) advisers on 1 January 2022.

             (2)  For the purposes of subsection (1), the specified day is the day that a person’s registration as a registered tax (financial) adviser commences.

3‑172  Transitional—other relevant providers on 31 December 2021

             (1)  The requirements in Division 3 of Part 3 of this instrument do not apply to a person for the period specified by subsection (2) if:

                     (a)  the person was a relevant provider immediately before 1 January 2022; and

                     (b)  the person is an existing provider (within the meaning of section 1546A of the Act); and

                     (c)  the person is not covered by section 3‑170 or 3‑171.

             (2)  For the purposes of subsection (1), the period specified is the period, for a person, from 1 January 2022 to the earliest of the following times:

                     (a)  if the person has not met the education and training standard in subsection 921B(3) of the Act on the exam cut‑off day (within the meaning of section 1684 of the Act) for the person, and the person is a relevant provider on that day—the exam cut‑off day for the person; and

                     (b)  otherwise—31 December 2025.

3‑173  Transitional—commercial law courses completed before 1 January 2022

                   For the purposes of sections 3-60 and 3-65 of this instrument, a person is taken to have completed a course in commercial law if:

                     (a)  the person successfully completed the course before 1 January 2022; and

                     (b)  the course was a course approved by the Tax Practitioners Board under paragraphs 301(b), 302(b) and 303(a) of Schedule 2 to Tax Agent Services Regulations 2009 (as in force on 31 December 2021).

3‑174  Transitional—tax law courses completed before 1 January 2022

                   For the purposes of sections 3-60 and 3-70 of this instrument, a person is taken to have completed a course in Australian taxation law if:

                     (a)  the person successfully completed the course before 1 January 2022; and

                     (b)  the course was a course approved by the Tax Practitioners Board under paragraphs 301(b), 302(b) and 303(a) of Schedule 2 to Tax Agent Services Regulations 2009 (as in force on 31 December 2021).

Subdivision 6-EApplication and transitional arrangements in relation to continuing professional development

3‑200  Application—Additional requirements for tax‑specific CPD

                   Division 5 of Part 3 of this instrument applies in relation to CPD years that begin on or after 1 January 2023.


Schedule 3—Specified approved providers

Part 2—Tax law courses

Note:       See subsection 3-70(4)

                   For the purposes of paragraph 3-70(4)(c), the following organisations are specified:

CPA Australia

Financial Planning Association of Australia